47 V.I. 215 | Superior Court of The Virgin Islands | 2005
MEMORANDUM OPINION
(November 23, 2005)
THIS MATTER is before the Court on Defendant Shell Oil Company’s [hereinafter “Shell”] Motion for Summary Judgment. The Plaintiffs
I. BACKGROUND
From 1982 to 1988, Shell supplied catalyst
Beginning in 1996, the Plaintiffs, employees of HOVIC and Litwin, sued Shell, among other defendants, for injuries stemming from exposure to toxic substances, on grounds of: (1) negligent failure to warn (Count I); (2) supplying a chattel dangerous for intended use, defective by way of failure warn (Count II); (3) battery (Count III); and (4) fraudulent concealment (Count IV). Several plaintiffs also maintained actions for punitive damages (Count V) and loss of consortium (Count VI), where applicable. All counts therein pertained to Shell’s supply of catalyst. In 1997, the Plaintiffs’ cases were consolidated into a pretrial docket under the caption of In re Kelvin Manbodh Asbestos Litigation Series, Civ. No. 324/1997. After settling claims against most of the other defendants,
By motion, Shell asserts, as its primary contention,
II. SUMMARY JUDGMENT STANDARD
The standard governing summary judgment in the Superior Court is found in Rule 56 of the Federal Rules of Civil Procedure. SUPER. Ct. R. 7; see Green v. Hess Oil V.I. Corp., 29 V.I. 27, 30 (Terr. Ct. 1994) (applying Federal Rule 56 to a motion for summary judgment). Summary judgment is appropriate where “the pleadings, depositions,, answers to interrogatories, and admissions on file, together with affidavits,, if any, show that there is no genuine issue as to any material fact and .that, the moving party is entitled to a judgment as a matter of law.”. FED. R. Civ. P. 56(c). While substantive law will determine if a fact , is material, whether a dispute of material fact is genuine instead turns on the presence of evidence “such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).
Courts deciding whether such genuine issues exist shall view the facts in a light most favorable to, , and draw all reasonable inferences in favor of, the nonmoving party. Christopher v. Davis Beach Co., 15 F.3d 38, 40, 29 V.I. 388 (3d Cir. 1994). Consequently, the initial burden of proof for summary judgment lies with the moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970). However, once the moving party has carried its burden of establishing the absence of genuine issues of material fact, “its opponent must do more than simply show that there is some metaphysical doubt as to material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475, U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986). The nonmoving party must “set forth specific facts showing that there is a genuine issue-for trial.” FED. R. Civ. P. 56(e).
III. CHOICE OF LAW
The parties’ uncertainty regarding the applicable Restatement provisions
The Territory of the Virgin Islands possesses a unique status
The rules of the common law, as expressed in the restatements of the law approved by the American Law Institute, and to the extent not so expressed, as generally understood and applied in the United States, shall be the rules of decision in the courts of the Virgin Islands in cases to which they apply, in the absence of local laws to the contrary.
1 V.I.C. § 4. Title 1, section 4 commands courts to apply the rules of the common law where there is no local law to the contrary. To identify the applicable common law in those circumstances, the language of title 1,
Because this dispute ultimately turns on the interpretation of title 1, section 4, the Court must resort to rules of statutory construction. The guiding principle of statutory construction provides that when determining the meaning of a statute, words and phrases are to be read within their context and construed according to the common and approved usage of the English language. 1 V.I.C. § 42. Where the language of a statute is ambiguous when read as a whole, however, courts should turn to both intrinsic and extrinsic aids to elicit the legislative intent. See generally 2A NORMAN J. SINGER, SUTHERLAND STAT. CONST. §§ 45.02 at 14 (6th ed. 2000) [hereinafter “SINGER”] (acknowledging that a statute is ambiguous, if it is susceptible to “being understood by reasonably well-informed persons in either of two or more senses.”); 47.01 at 209-10 (intrinsic aids of composition and structure may help discern an ambiguous statute’s meaning); 48.01 at 409-11 (extrinsic aids, facts comprising the history of a statute, are also probative of a statute’s meaning).
The meaning of “restatements of law” in this context is also ambiguous as it is unclear to which installment of the Restatement local
A. Historical Discussion
According to the History comment
Viewed collectively, however, this list of historical sources fails to conclusively explain the apparent delegation of the Legislature’s lawmaking authority and responsibility
Judge Alito of the Third Circuit, in a concurring opinion, provides further clarification on the reference to the ALI. Dunn, 28 V.I. at 500-02, 1 F.3d at 1391-93. According to Judge Alito, title 1, section 4 is not a delegation, but an acknowledgement that the drafters of the code viewed the Restatement as a “presumptively authoritative” expression of the rules of the common law. Id. at 501-02, 1392. Title 1, section 4, then, “does not incorporate all of the Restatement provisions in effect in 1957 as if they were actual statutory text.” Id. at 502, 1392. Reconciling Judge Alito’s interpretation with the common thread in these historical notes that the rules of decision and ordinances have been and continue to be the last word on local matters, the Court concludes that title 1, section 4 establishes a two-tiered common law system. Courts must first follow local precedent and second, the majority rules of the common law established by precedent in courts of the United States. So it is in this vein that the Court identifies the meaning of title 1, section 4 of the Virgin Islands Code. .
There are no less than three plausible interpretations
B. Newest Restatement Approach
First, the Legislature may have intended title 1, section 4 to be self-enacting by automatically adopting the most recent embodiment of the common law, here the Restatement (Third) of Torts: Products Liability
This reading • is unconvincing because it contravenes the plain language of the statute by ignoring any judicial precedent adopting local law to contrary after the enactment of title 1, section 4 in 1957.
Similarly, the decision to ignore precedent and apply the newest Restatement may be attacked because in some circumstances, as with the Restatement (Third) of Torts: Products Liability Topic 1 (sections 1 through 4), the Restatement does not represent the majority rule, but instead endorses a minority rule favored by legal scholars. See generally Ellen Werthemier, The Third Restatement of Torts: An Unreasonably Dangerous Doctrine, 28 SUFFOLK U. L. Rev. 1235, 1244-45 (1994) (criticizing the Restatement (Third) as the product of scholars who favor defendants). Varlack v. SWC Caribbean, Inc. noted that the Legislature employed the Restatement because it “accurately summarize[d] the [rules of the] common law.” 13 V.I. 666, 685, 550 F.2d 171, 179-80 (3d Cir. 1977). To accurately summarize the common law, according to the Varlack panel, was to advocate the majority rule. 13 V.I. at 680-81, 550 F.2d at 178. To the extent that this is not the case with the Restatement (Third) of Torts: Products Liability, the above rationale advocating the newest Restatement is undercut. In situations where there is no majority rule, in the Restatement or otherwise, courts should apply the soundest rule. Polius v. Clark Equip. Co., 802 F.2d 75, 77 (3d Cir. 1986). By considering both the prevalence and where there is no majority, the soundness of the doctrine, the Third Circuit supplied guidance for discerning what the “rules of the common law” are from the directives to apply “the Restatements of law approved by the [ALI]” and “to the extent not so expressed, as generally understood and applied in the United States[.]”
The next approach, a hybrid of the first and last, suggests that title 1, section 4 of the Virgin Islands Code may require the courts to adopt the most recent version of the Restatement unless local law to the contrary, in the form of an earlier, contrary Restatement or other common law rule, has been previously endorsed by the courts. Under this framework, the law would then be an amalgam of statutes, rules of decision adopting particular sections or rules, and where there was no local law to the contrary, the summarization of United States common law embodied in the most recent Restatements. This scheme, however, suffers from some of the same infirmities as the first approach, including the possibility that the newest Restatements endorsed a minority rule. Likewise, this approach may be attacked as contravening the plain language of the text, because to do so would be inserting the word “newest” to modify “restatements.” 1 V.I.C. § 4. This characterization cannot be found anywhere in the language of the statute. Id.
Aside from the textual concerns, the hybrid approach may be similarly criticized for promoting the interests of convenience over adherence to the law. Mischaracterizations of section 4’s mandate in the rubric of “controlling law” aside, courts frequently apply a Restatement in a cursory, rubber-stamp fashion without considering the prevalence of the particular provisions. See Armstrong v. Armstrong, 266 F. Supp. 2d 385, 396 n.8 (D.V.I. App. Div. 2003); Paul v. Electric Ave., Civ. No. 1999-055, 2001 U.S. Dist. LEXIS 14261 (D.V.I. App. Div. 2001) (unpublished). But see Hood v. Hess Oil V.I. Corp., 22 V.I. 456, 460 n.4, 650 F. Supp. 678, 680 n.4 (D.V.I. 1986) (providing an example of the proper inquiry). This popular approach oversimplifies a process that requires courts to identify and apply the majority doctrine. That is, where a court cites to title 1, section 4, acknowledges the absence of an endorsement by courts of a particular Restatement provision and subsequently applies the corresponding most recent Restatement, this should not be the end of the inquiry. Though not expressly stated in section 4, according to Varlack, there should be some explanation accompanying a court’s endorsement. 13 V.I. at 680-81, 550 F.2d at 178. A contrast of these three opinions should illustrate this Court’s concerns.
In contrast, the Hood court considered persuasive authority to arrive at its conclusion that the Virgin Islands would adopt a distinction, found in a majority of jurisdictions, between direct and vicarious liability for the negligence of employers of independent contractors. Hood, 22 V.I. at 460 n.4, 650 F. Supp. at 680 n.4. Hood’s brief analysis suggests not only that such inquiries are feasible, but also that they must be an important aspect of this Court’s choice of law analysis. This conclusion militates against endorsing the Hybrid Approach, under which such analysis is eschewed.
D. Original Restatement Approach
As a third approach, the proper reading of title 1, section 4 of the Virgin Islands Code may be that the Legislature advocated the Restatements in existence at the time of its passage in 1957 to lay a foundation for courts to begin crafting decisions while the Legislature took the time necessary to draft the Code for the Virgin Islands. This approach does not suggest that the Restatements “are tantamount to Virgin Islands statutes.” Dunn, 28 V.I. at 501, 1 F.3d at 1392. Instead, the Restatements were meant to guide judges, as an expression of the common law as it was understood in the United States at that time, in their crafting of the local common law.
Though title 1, section 4 does not so specify, it is likely that the drafters contemplated that the judicial adoption of the Restatements
This reading is compelling because, among other reasons, it is unlikely that the Legislature contemplated the amending of the Restatements at all, and much less so in the fashion that the ALI did.
Finally, this approach helps resolve how courts in the past transitioned from the Restatement (First) of Torts to the Restatement (Second) of Torts. First, Varlack provides a partial explanation. In the Varlack opinion, the Third Circuit recognized that since the Restatement (First) of Torts was silent on the particular area of interest, courts in the Virgin Islands were correct to look to the Restatement (Second) of Torts. 550 F.2d at 178, 13 V.I. 666.
Second, the language of the statute helps explain why most courts in the Virgin Islands today uniformly apply the Restatement (Second) of Torts, despite the preeminence of Restatement (First) of Torts at the time of title 1, section 4’s passage: it is because of the legislatively-provided opportunity for departure in section 4. See Action Eng’g v. Martin Marietta Aluminum, 670 F.2d 456, 459-60 (3d Cir. 1982) (eschewing strict adherence to Restatement (First) when it no longer accurately summarized the common law). The current judicial landscape is generally not the result of a failure to follow precedent. But see Sunny Isle Shopping Ctr., Inc. v. Xtra Super Food Centers, 237 F. Supp. 2d
E. Chosen Framework
Ultimately, this Court is persuaded that the Original Restatement Approach is most faithful to the language of the enactment and therefore endorses it by applying it to the facts of this case. This Court concludes that title 1, section 4’s reference to the “restatements” refers to the Restatement in existence at the time of its enactment in 1957 and reflects an intent to fill a void until such a time when the Legislature codified law or the judicial branch confirmed the propriety of particular Restatements. Thus, title 1, section 4 mandates that absent statutory or precedential law to the contrary, courts in the Virgin Islands must apply the current common law majority rule, first, as expressed, in the Restatement in existence at the time of its enactment and second, to the extent not so expressed, as in more recent versions of the Restatement; failing that, courts shall resort to the majority common law rules as generally understood and applied in the United States. This second inquiry should begin with the consideration of whether more recent versions of the Restatement now reflect the majority rule, before resorting to common law precedents.
This conclusion is bolstered by the previous historical discussion. Under Danish colonial law, in certain circumstances, the local courts
Since the Restatement (First) is the baseline for this jurisdiction’s rules of decision as the primary expression of the majority rules of the common law, it is important to clarify what allowances exist in this framework for applying other installments of the Restatement or the majority rules followed by the courts of the United States.
Case law may also displace the majority rules contained in the Restatement (First). Again, as with legislation, there is a dichotomy between case law that abandons the Restatement (First) and that which endorses it. Courts are well within their prerogatives to determine the Restatement (First) no longer represents the majority rule or where there is no majority rule, the most sound rule. Polius v. Clark Equip. Co., 802 F.2d at 77; Varlack, 13 V.I. at 680-81, 550 F.2d at 178; Action Eng’g, 670 F.2d at 459-60. In fact, there is an express statutory grant of authority for the departure in such circumstances, when “to the extent not so expressed, [courts shall apply the rules of the common law] as generally understood and applied in the United States.” 1 V.I.C. § 4
Adhering to this framework ensures that the Virgin Islands do not operate in such a disparate fashion from other United States jurisdictions. Courts in the Virgin Islands must apply the majority rule, unless the Legislature or appellate courts have adopted positions that are to the contrary. Whereas other jurisdictions have a long history of common law and use the Restatements as mere adjuncts to guide their jurisprudence, the Virgin Islands should do the same to the extent possible. For the Virgin Islands, with the Restatement (First) as a baseline for expression of the common law, newer installments should be applied only as adjuncts, where they reflect a change in the majority rule. This Court now turns its attention to the facts of this case.
F. Application
To recount briefly, on pending motion, Plaintiffs and Shell dispute the viability of the sophisticated intermediary affirmative defense as it applies to failure to warn causes of action in negligence and strict liability contexts. The defense bars recovery where a defendant has adequately warned a sophisticated intermediary and reasonably relied on
In contrast, the Restatement (First) of Torts, Chapter 14, Liability of Persons Supplying Chattels for Use of Others, did not contain any strict products liability. Only with the drafting of the Restatement (Second) of Torts did the ALI overhaul the products liability provisions to include the section relevant to the instant matter. Among the changes, section 402A was added as a part of the new strict liability topic 5 in Chapter 14. Since then, section 402A garnered widespread acceptance, including the adoption by courts in this jurisdiction. See generally Polius, 802 F.2d at 86-87; Verge v. Ford, 581 F.2d 384, 386, 16 V.I. 41 (3d Cir. 1978).
In Paul, the Appellate Division reviewed a Territorial Court decision granting a motion for summary judgment in favor of a defendant, because the plaintiff could not prove that the defendant manufactured the defective lamps at the center of the dispute. 2001 U.S. Dist. LEXIS 14261. In affirming on different grounds, the court referenced, without explanation, the Restatement (Third) of Torts: Products Liability as the source for general strict liability language. Paul, 2001 U.S. Dist. LEXIS 14261. Of particular import, the applicability of the Restatement (Third) of Torts was not raised by either party by motion at the trial level or on brief before the Appellate Division. Nor was the determination of applicable law central to the court’s holding, as the motion for summary judgment turned on the sufficiency of evidence. 2001 U.S. Dist. LEXIS 14261. Consequently, absent an explanation for adopting the newer Restatement, the Court need not follow the Paul court, as the treatment of the Restatements was mere dicta. Even if it were part of the holding, however, this is an unpublished opinion without precedential value.
Similarly, in the Hamlet case, the decision by the Territorial Court to apply RESTATEMENT (THIRD) OF TORTS: PRODUCTS LIABILITY section 1 is also dicta. In the Hamlet opinion, the court expressly relies upon the Paul decision to justify its application of the Restatement (Third) of Torts: Products Liability. Hamlet, 44 V.I. at 110. As discussed, the Court does not find Paul’s application of the Restatement (Third) persuasive. Lending credence to this Court’s hesitation, the Hamlet court applied
While the Superior Court recognizes the merits of adopting the Restatement (Third) of Torts: Products Liability topic 1 it will refrain from applying this topic until the Legislature or appellate courts supply such a directive. Having determined that the specific topics contained in the Restatement (First) and (Second) of Torts are the law through its adoption by appellate courts and/or as the majority rules in adherence to Varlack, this Court must apply it despite a clearer test enunciated in the Restatement (Third) of Torts. Since the appellate judiciary has “spoken” on this matter, it is not the place of this Court to deviate. This Court is bound to follow precedent. Polius, 802 F.2d at 80; Murray v. Fairbanks Morse, 610 F.2d 149, 163 (3d Cir. 1979).
IV. APPLICATION OF SUMMARY JUDGMENT
Defendant Shell moved for summary judgment on four counts of the Plaintiffs’ Complaint. As to Counts III and IV, this Court finds Shell’s conduct fails to reflect the requisite level of intent for such causes of action to stand. Summary judgment will be granted. For Counts I and II, however, there exists a genuine issue of material fact as to whether Shell has established the elements of the sophisticated intermediary defense, and thus, summary judgment is denied.
A. Count III: Battery
To establish a prima facie case for harmful-contact battery, Plaintiffs must assert sufficient evidence to satisfy the elements embodied in the Restatement (First) of Torts § 13 (1934).
Without expressly contesting the existence of such a contact, Shell vigorously contends that the Plaintiffs cannot establish on this record the intent element of a battery claim. The Court agrees. In their Complaint, the Plaintiffs allege that exposing employees to inherently dangerous toxic substances amounted to battery.
B. Count IV: Fraudulent Concealment
Similarly, a cause of action for fraudulent concealment cannot be maintained. The touchstones for fraudulent concealment are (1) the existence of a defendant’s affirmative steps to conceal the wrongful conduct and (2) actual concealment. Simmons v. Martinez, 45 V.I. 278, 284-85 (Terr. Ct. 2003) (referencing Montrose Medical Group Participating Savings Plan v. Bulger, 243 F.3d 773 (3d Cir. 2001)); Restatement (First) of Torts § 550 (1938).
C. Counts I and II: The Applicability of the Sophisticated Intermediary Defense
The Motion presents a closer question with respect to Counts I and II. For the purposes of this discussion, this Court assumes that Shell failed to directly warn Plaintiffs of the dangers of its catalyst products. The main inquiry is whether the sophisticated intermediary defense operates to shield Shell from liability under Counts I and II of the Plaintiffs’ Complaint despite this failure. This inquiry, then, turns on whether Shell had a duty to directly warn Plaintiffs.
Under the Restatement (First) of Torts and Restatement (Second) of Torts, causes of action for failure to warn exist in sections 388 and 402A, respectively, as alternative theories of recovery.
Manufacturers, suppliers and sellers generally owe a duty to warn foreseeable users of known dangers inherent in their products. Restatement (First) of Torts § 388 cmt. j. This duty does not extend, however, to easily discoverable and obvious dangers, which “a mere casual looking over will disclose.”
The sophisticated intermediary defense assesses Shell’s reasonableness in relying on HOVIC to convey adequate warnings. Whether a supplier’s reliance on an intermediary was reasonable turns on the application of a multi-factor balancing test, embodied in comment 1, of Restatement (First) of Torts section 3 88.
(1) the dangerous condition of the product; (2) the purpose for which the product is used; (3) the form of any warnings given; (4) the reliability of the third party as a conduit of necessary information about the product; (5) the magnitude of the risk involved; and (6) the burdens imposed on the supplier by requiring that [it] directly warn all users.
Smith v. Walker C. Best, Inc., 927 F.2d 736, 739-40 (3d Cir. 1990); Goodbar v. Whitehead Bros., 591 F. Supp. 552, 561 (W.D. Va. 1984), aff’d sub nom. Beale v. Hardy, 769 F.2d 213 (4th Cir. 1985) (numbering added). If the reliance is reasonable, Shell’s duty to warn employees is discharged by warning HOVIC. At the most basic level, then, this test considers “whether [Shell’s] method gives a reasonable assurance that
1. Nature of Dangerous Condition of the Product
Beginning with the first factor, the dangerous condition of the product, the inquiry turns on whether the danger associated with the product is open and obvious or latent. Goodbar, 591 F. Supp. at 561. Where the danger is latent, the supplier’s reliance on an employer to convey the warning appears less reasonable. Correspondingly, the more open and obvious the danger is, the more reasonable the supplier’s reliance on the intermediary.
The product at issue is Shell’s catalyst, in fresh and spent forms. Currently, both Plaintiffs and Shell agree that spent catalyst presented a greater risk to handlers than fresh catalyst because of the potential, during the refining process, for the creation of nickel subsulfides and nickel cabonynl, a family of possible carcinogens and a lethal gas.
Such warnings, or their absence, evidence the initially held industry belief that employees exposed to spent catalyst should adhere to the same precautions for exposure to new catalyst. This belief was apparently mistaken. This confusion indicates how latent the dangers of spent catalyst were and supports the conclusion that Shell’s reliance may have been unreasonable.
2. Use of Product
Conversely, the second factor, which evaluates the purpose of use of the product — assessing the fit of the type of use with level of warning — points to the opposite outcome. The Plaintiffs at the HOVIC refinery used the product in a manner that was anticipated, in accordance with a warning tailored to that setting. See e.g., In re TMJ Implants Products Liability Litigation, 872 F. Supp. 1019, 1029 (D. Minn. 1995) (finding that the anticipated type of use might dictate different levels of warnings). The TMJ Implants Products Liability court found that where the warnings were tailored to an industrial setting, the anticipated type of use was industrial, and consumer uses were expressly warranted against, defendant’s reliance on the intermediary to convey the proper consumer-driven warnings was reasonable. Id. Specifically, Dupont’s Teflon products were only warranted for industrial uses. Dupont communicated to the intermediary that Teflon had not been tested for consumer medical applications and that many additional precautions were required before such applications were advisable. In contrast, where the warnings are tailored to industrial uses, when the supplier knew of the intermediary’s consumer setting, a similar reliance would be less reasonable. As a practical matter, the general consuming public knows less about the
3. Form of Warnings
With the third factor, the form of warnings, courts have taken varied approaches. Within the Restatement, a dichotomy implicitly exists between those articles that carry their own messages through labels or devices and those where the warnings are communicated separately. Restatement (First) of Torts § 388 cmt. 1. In certain cases, the inquiry has turned on the intensity of the warning. McLaughlin v. Mine Safety Appliances Co., 11 N.Y.2d 62, 181 N.E.2d 430, 434, 226 N.Y.S.2d 407 (1962) (finding that portion of warning conveyed in small lettering was not likely to be effective and did not act to insulate defendant from liability). Other courts weigh whether the warnings were in a form that can “reasonably be expected to catch the attention” of the intended audience. Bean v. Baxter Healthcare Corp., 965 S.W.2d 656, 664 (Tex. App. 1998) (considering whether a reasonable plastic surgeon would have noticed the warning associated with a breast implant). All these inquiries concentrate on the adequacy of the warnings furnished to an intermediary to communicate the risks associated with the product.
Some courts consider an employer’s knowledge of the risks in lieu of this determination. An intermediary’s knowledge of the risks associated with a product also concerns the adequacy of a warning. An intermediary such as HOVIC is deemed knowledgeable “where either (1) the manufacturer has provided an adequate, explicit warning of such dangers; or (2) where information on the product’s dangers is available in the public domain.”
Allegedly created in compliance with the Occupational Safety and Health Administration [hereinafter “OSHA”] and the Department of Transportation standards, Shell’s labels
Addressing these issues in the reverse, this Court recognizes that there is no physical evidence in the record that definitively proves or disproves Shell’s purported practice of shipping all catalyst containers with the labels. According to its designated representative, Shell was under regulatory obligations — obligations that it complied with — to ship all materials with labels.
Even if it were admitted, there is nothing in the affidavit to suggest that Shell Oil Company and Shell Oil Company of Puerto Rico had the same practices with respect to labeling. Also absent is evidence that Shell treated manufactured products like catalyst and wholesale products such as MEK, in the same manner. Moreover, the affidavit does not indicate that Shell Oil Company and Shell Oil Company of Puerto Rico, Ltd., were subject to the same regulatory scheme, arising out of interstate commerce. But these problems with Plaintiffs’ rationale pale in comparison to the inferential gap that is required to conclude that Shell’s containers of catalyst arrived with no labels at all. The Ramirez-Pons affidavit suggests that at least there was some label on the MEK drums. Thus, this Court rejects Plaintiffs’ argument that no labels were attached.
Next, this Court addresses Plaintiffs’ claims regarding the inadequacy of the warning, assuming that the labels were affixed as Shell contends. While the label may fail to provide information regarding the specific triggering requirement of OSHA’s TLVs, it does direct a user to consult additional materials where the TLVs may be found. Beginning with the January 1983 revisions to the labels
BE SAFE
READ OUR PRODUCT SAFETY INFORMATION AND PASS IT ON PRODUCTS LIABILITY LAW REQUIRES IT.
The same cannot be said for the warnings covering the handling of spent catalyst. None of the MSDS that Shell can demonstrate were sent to HOVIC contained information warning of the different risks posed by spent catalyst.
This Court notes, however, that such a delivery sequence is inconsistent with other Shell testimony in the record. The internal inconsistencies concern the purported dates of delivery of the respective MSDS versions. Shell’s record suggests that it sent MSDS version 6655, unrevised, to HOVIC on February 27, 1984; revised versions 6655-1, and 6655-6, must have been promulgated sometime later.
Before determining Shell’s warning to be inadequate, however, this Court notes that even if there was .a gap in Shell’s MSDS coverage, relating to spent catalyst, a specific warning in the safety bulletins could bridge it. Yet, the only bulletin that Shell can confirm as sent was Shell Chemical Company’s Technical Bulletin, version number 175-80.
While many of Shell’s warnings governing, the adverse consequences of handling catalyst were affixed to the packaging in the form of labels, others were contained in only the MSDS and bulletins, physically separate from Shell’s products. To the extent that more important warnings only arrived separately, were less emphasized, or were not targeted to the intended audience of refinery workers this would make Shell’s reliance seem less reasonable. Similarly, the. collective warnings’ failure to communicate the greater danger ,of spent, catalyst weighs heavily against such reliance being reasonable.
4. Reliability of Intermediary as Conduit for Warnings
Next, the fourth factor assesses the reliability of the sophisticated intermediary as a conduit in relaying the warnings received’ from the
Although there is no evidence regarding HOVIC’s purported reputation as a knowledgeable user, Shell’s failure to plead this component is not fatal to establishing the defense. The Court will not go so far as to sanction this failure by taking judicial notice of the size of HOVIC’s refinery as an inference for reputation, as Shell recommends.
Independent of the inquiry into HOVIC’s sophistication, is an intermediary’s ability to communicate the warnings. If HOVIC is “known to be careless or inconsiderate” or Shell had “reason to expect, or at least suspect, that the information will fail to reach those who are to use the chattel and whose safety depends upon their knowledge of its true character,” then Shell will have unreasonably relied on HOVIC to convey said warnings. Restatement (First) of Torts § 388 cmt. 1. As to this factor, Plaintiffs suggest that there is a presumption that warnings were not conveyed, such that the defendant suppliers must demonstrate their efforts to ensure that warnings were received by the ultimate users. It is instructive that the Smith court refused to require suppliers to take such affirmative steps to determine whether a warning was actually conveyed. Smith, 927 F.2d at 741. This decision implicitly suggests that evaluating the need for affirmative steps might be more aptly considered under the sixth factor.
Shell contends that the presence of OSHA regulations make the conveyance of warnings by employers mandatory, thereby justifying their blind reliance on HOVIC to convey said warnings.
Plaintiffs attempt to tip the balance on this factor in their favor by positing that Shell failed to demonstrate due diligence. They suggest that
5. Magnitude of Risk
The fifth factor speaks to “the magnitude of the risk involved.” RESTATEMENT (First) OF Torts § 388 cmt. 1. The calculation of magnitude includes not only “the chance that some harm may result but also the serious or trivial character of the harm which is likely to result.” Id. This Court realizes that “[d]amage of potentially great severity but lesser likelihood of occurrence may warrant precautions equal to those taken to avoid harm of greater probability but lesser severity.” Dole Food Co., Inc. v. North Carolina Foam Indus. Inc., 188 Ariz. 298, 935 P.2d 876, 883 (Ct. App. 1996) (citing United States v. Carroll Towing, 159 F.2d 169 (2d Cir. 1947) (Hand, J.)). Both parties agree that the risks to employees’ health from repeated and excessive exposure to catalyst were both substantial and grave, as signaled by the warnings referencing cancer. Although there have been no experts designated to testify as to the causation tying the ailments present in the Plaintiffs to Shell catalyst, neither side seems to dispute the connection. Summarily, this significant risk of grave harm makes Shell’s reliance appear less reasonable.
Finally, the sixth factor considers the severity of the burden that arises from requiring suppliers like Shell to directly warn employees. While there are conceivable situations where requiring direct warnings would be more burdensome,
The Plaintiffs’ retort is twofold; first they suggest that such a warning was feasible in the negligence context and second, they argue that such a warning was required, as a non-delegable duty under strict liability.
Balancing the factors, the Court acknowledges an even split. The latent danger of the spent catalyst, the inadequacy of the warnings to communicate the dangers of spent catalyst, and the significant magnitude of the potential harm all militate in favor of requiring Shell to directly warn the workers at the refinery. The suitability of the warnings to the intended industrial use of the catalyst, the reliability of HOVIC as a conduit for the warnings and the heavy burden of directly warning end users all dictate an opposite finding. Ultimately, this test turns on the potential deficiencies of the warnings to HOVIC. For even industrial users were entitled threshold warnings concerning fundamental dangers of handling spent catalyst. Moreover, even as reliable as HOVIC may
VI. CONCLUSION
In conclusion, this Court holds that title 1, section 4 mandates that absent statutory or precedential law to the contrary, courts in the Virgin Islands must apply the current common law majority rule, as expressed, first, in the Restatement in existence at the time of its enactment and second, to the extent not so expressed, as generally understood and applied in United States, with such an inquiry beginning with subsequent versions of the Restatement. Because the Restatement (First) and (Second) of Torts represent the majority rules for negligent and strict liability failure to warn causes of action, respectively, and appellate courts in this jurisdiction have adopted the RESTATEMENT (SECOND) OF TORTS division 2, chapter 14, topic 5, the Court cannot endorse subsequent restatements without a directive to do so. Applying these principles, the Court also concludes the sophisticated intermediary defense represents the majority rule. However, since there are genuine issues of material fact as to Shell’s satisfaction of the requisite elements of the sophisticated intermediary defense, granting summary judgment on Counts I and II is improper at this time. Summary judgment on Counts III and IV, however will be granted in the accompanying order.
211 plaintiffs brought suit against. Shell in the In re Kelvin Manbodh Asbestos Litigation Series, and all but four remain a party to these proceedings.
Shell supplied nickel/molybdenum catalyst and catalyst support balls (product numbers 324, 424 and 514), in unknown amounts during said period to facilitate chemical reactions. (Trevino Dep. at 22:21, Ex. 2-C.) By its correspondence and bulletins, Shell also discussed supplying cobalt/molybdenum catalyst and catalyst support balls (product numbers 444 and 544). (Id; Willett Dep. at 83-92.) Each of the nickel catalysts and cobalt catalysts, regardless of the particular generation of catalyst, individually, presented the same health and safety risks to employees. (Willett Dep. at 120:24-25.)
All other defendants, aside from Mobil Oil Company, another catalyst supplier, settled with Plaintiffs or were dismissed from the case.
Originally, Shell argued that summary judgment was proper based on alternative grounds, both the Plaintiffs’ failure to designate a liability expert and the sophisticated intermediary defense, an affirmative defense in failure to warn actions (Counts I and II) recognized by numerous jurisdictions and the Restatement (Second) of Torts § 388 cmt. n. (1965). The liability expert ground appears to have been abandoned, as it has not been discussed in responses subsequent to the close of discovery. In conjunction, Shell still claims that with regards to the battery (Count III) and fraudulent concealment (Count IV) counts, the Plaintiffs failed to establish the requisite elements, specifically intent, necessary for the causes of action to stand.
Although the initial memoranda discuss relevant provisions of the Restatement (Second) of Torts, both Plaintiffs and Defendant now agree that the Restatement (Third) of Torts: Products Liability governs this dispute.
Under the Restatement (Second) of Torts, the cause of action for negligent failure to warn is embodied in section 388(c). In relevant part, the Restatement provides:
One who supplies directly or through a third person a chattel for another to use is subject to liability to those whom the supplier should expect to use the chattel with the consent of the other or to be endangered by its probable use, for physical harm caused by the use of the chattel in the manner for which and by a person for whose use it is supplied, if the supplier ...
(c) fails to exercise reasonable care to inform them of its dangerous condition or of the facts which make it likely to be dangerous.
Restatement (Second) of Torts § 388(c).
(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
Restatement (Second) of Torts § 402A (emphasis added).
The Restatement (Third) of Torts: Products Liability in section 1, comment a and section 2, comment n, abandon doctrinal designations in a failure to warn context. In comment a to section I, the drafters acknowledge that Restatement (Second) of Torts section 402A was ineffective in handling design defects and defects based on inadequate instructions (i.e. failure to warn), whose defining characteristic, the defect existed in all products, was distinct from manufacturing defects where the defect existed in only a select few. Restatement (Third) of Torts: Products Liability § 1 cmt. a, § 2 cmt. n. While an inquiry into a manufacturing defect was appropriately viewed through a lens of strict liability because the defect was an aberration of the manufacturing process, the analysis of other defects instead focused on the reasonableness of the manufacturer’s decision-making, a test more appropriate in a negligence context. Id. The language of these provisions — sections 388 and 402A — was redrafted in the most recent version of the Restatement to separate the analysis accordingly. The new sections now work in tandem, with section 1 creating a unitary cause of action for defective products and section 2 defining the types of defects and their corresponding standards:
§ 1. Liability of Commercial Seller or Distributor for Harm Caused by Defective Products
One engaged in the business of selling or otherwise distributing products who sells or distributes a defective product is subject to liability for harm to persons or property caused by the defect.
§ 2. Categories of Product Defect
A product is defective when, at the time of sale or distribution, it contains a manufacturing defect, is defective in design, or is defective because of inadequate instructions or warnings. A product:
(a) Manufacturing Defect: contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product;
(b) Design Defect: is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe;
(c) Warning Defect: is defective because of inadequate instructions or warnings when the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings by the seller or other distributor, or a predecessor in the commercial chain of distribution,*226 and the omission of the instructions or warnings renders the product not reasonably safe.
Restatement (Third) of Torts: Products Liability §§ 1, 2 (emphasis and bolded subtitles added). The new provisions create one cause of action, where two existed before, for defective warnings whose touchstones are the (1) existence of a defect, (2) foreseeability of the risk of harm and (3) reasonableness of the potential precautions in avoiding/reducing that risk. Of particular import is the abandonment of the typical strict liability/negligence designations. Comment n to section 2 explains that the new language supports the elimination of the common practice of presenting dual theories of recovery (i.e. in negligence and strict liability) to a finder of fact in a failure to warn context. This Court views this development as a welcome departure from the previous, clumsy, formalistic scheme. The practical effect here, then, would be to eliminate Counts I and II of the Plaintiff’s Complaint and substitute one count based on a defective product— defective warning — analyzed under the Restatement (Third) of Torts: Products Liability framework.
Only one other United States jurisdiction, the Northern Mariana Islands, has a similar code adopting the American Law Institute’s Restatement of law as its “rules of decision.” 7 N. Mar. I. Code § 3401 (2004). See also, Bolalin v. Guam Publications, Inc., Civ. No. 92-0902 (N.M.I. Super. Ct. Dec. 3, 1992) (Opinion and Order), aff’d, 4 N.M.I. 176 (N. Mar. 1. 1994). Most other jurisdictions view the Restatements as merely an adjunct in their consideration of legal issues. See generally Harvey S. Perlman, The Restatement Process, 10 KAN. J. L. & Pub. Pol’y 2, 4-6 (2000); Shawmut Worcester County Bank v. First Am. Bank & Trust, 731 F. Supp. 57, 62-63 (D. Mass. 1990).
Titles one through thirty-four of the initial Virgin Islands Code were proposed in Bill 425 and adopted as Act 160 on May 16, 1957. 1957 V.I. Sess. Laws 20 (Act No. 160). The microfilm containing legislative history between February 28, 1957 and April 13, 1959, however, was lost. Instead, this Court may consult The Preface to the First Edition of the Virgin Islands Code and the referenced history and prior law notes to decipher the intent of the drafters of the Code and provide a historical context. See Singer, supra, § 48.11 at 457-58 (“where there is no legislative history ... reports of the [) council can be acceptable source of information on legislative intent”); Preface First Edition, reprinted in V.I. Code Ann. tit. 1, Foreword, Preface, Historical Documents, Organic Acts, and U.S. Constitution at ix-x (1995) (preceding V.I. Code Ann. tit. 1) [hereinafter “Preface”]. The Preface suggests that titles one through thirty-four consisted of a rearrangement and editing of the 1921 Codes of St. Thomas, St. John and St. Croix and an endorsement some uniform acts chosen “to fill in the gaps.” Preface, supra, at ix. This Preface also documents the process by which a Code Advisory Committee, created by the Secretary of the Interior, discussed and recommended the provisions that were ultimately enacted into law by the Legislature in Act 160. Preface, supra, at ix. The Secretary of the Interior was purportedly authorized to arrange for the preparation of a code under section 8(e) of the Revised Organic Act of 1954, which has since been repealed. Preface, supra, at ix.
The History comment was inserted by the publisher contemporaneously with the publication of the First Edition of the Virgin Islands Code. See Preface, supra.
Both section 5 of title 1 of the Virgin Islands Code, generally, and the tables preceding the index, specifically, confirm the replacement of 1921 Codes’ Title IV, ch. 13, § 6 with title 1, section 4. 1 V.I.C. § 5(2); V.I. Code Ann. Tables (2004). For an application of the corresponding 1921 provisions, see e.g., In re Gibbons, 1 V.I. 57, 59 (D.V.I 1924) and People v. Charles, 1 V.I. 236, 238 (D.V.I. 1929). The courts in these cases looked to the decisions of England and the United States to help resolve disputes in criminal law.
The earliest reference to the Restatements of Law came in Callwood v. Kean, 2 V.I. 526, 189 F.2d 565 (3d Cir. 1951). The Restatements were acknowledged as representing the common law of England as understood in the United States, but were ultimately not applied because at the time the will in dispute was drafted, Danish law was still in force. Callwood, 2 V.I. at 542.
This Court recognizes that the ALI does not have the actual authority to draft code, but their purported codification of the common law might have similar practical effects in this jurisdiction depending upon the interpretive approach endorsed by this Court.
The approach of Judge Alito of the Third Circuit Court of Appeals deserves mentioning. See Dunn v. HOVIC, 28 V.I. 467, 500-02, 1 F.3d 1372, 1391-93 (3d Cir. 1993) (en banc) (Alito, J., concurring). In a concurring opinion that dealt with a matter of first impression, Judge Alito briefly discusses both, the history of title 1, section 4 and his interpretation of that provision, though he does not suggest which Restatement applied. Judge Alito posits that title 1, section 4 mandates the application of the common law of the United States in the “absence of a relevant statutory provision.” Id. at 501, 1392. The Restatement plays a limited role in Judge Alito’s framework. It is only important to the extent that it summarizes the common law, the “body of rules established by precedent as generally understood and applied in the United States.” Id. (internal quotations omitted). This approach forecloses a policy-based deviation from the common law majority rule, a freedom typically bestowed upon courts of last resort. Id. at 502, 1392. According to Judge Alito, courts in this jurisdiction are precluded from weighing the merits of clear, common law rules. Id. Although this Court’s reasoning and ultimate interpretation of title 1, section 4 — that it mandates courts to apply the common law of the United States under certain circumstances — does not differ markedly from Judge Alito’s, it reads “local law to the contrary,” to include precedent. Miller, 27 V.I. at 367, 958 F.2d at 1237.
In this division of the Restatement of Torts, there are four chapters, each subdivided into topics; spanning twenty-one sections. The ALI, through the piecemeal approval of this new division, appears to supplant, at least in part, Chapter 14 (Liability of Persons Supplying Chattels for the Use of Others), previously subsumed within the Negligence Division (No. 2) in the Restatement (First) and (Second) of Torts. In addition, it contains some definitional sections which may supersede parts of Chapter 1 of Restatement (First) and (Second) of Torts.
Following this approach might lead to a trial court disregarding the directive of an appellate court. See e.g., Sunny Isle Shopping Ctr., Inc. v. Xtra Super Food Centers, 237 F. Supp. 2d 606, 613 (D.V.I. 2002) (applying the Restatement (Second) of Contracts section 356 to a liquidated damages provision, without acknowledging that the Third Circuit had adopted section 339 of the Restatement (First) of Contracts, the previous Restatement on liquidated damages, in Co-Build Co., Inc. v. V.I. Refinery Corp., 15 V.I. 528, 533, 570 F.2d 492, 494-95 (3d Cir. 1978)).
See e.g., Polius v. Clark Equip. Co., 802 F.2d 75, 80 (3d Cir. 1986); Murray v. Fairbanks Morse, 610 F.2d 149, 154 (3d Cir. 1979); Verge v. Ford, 581 F.2d 384, 386, 16 V.I. 41 (3d Cir. 1978).
This presumes that there is some significant difference between the two Restatements, as with this case. If the newer Restatement copied the language of an old Restatement, then, the newer Restatement would not be contrary. In fact, adopting the newer Restatement would be consistent. See e.g., In re Georg’s Estate, 298 F. Supp. 741, 744, 7 V.I. 298 (D.V.I. 1969)
The Court also recognizes that holding that the Legislature intended to grant the ALI power to essentially enact law in the Virgin Islands, as this approach suggests, may subject this provision to collateral attack as an improper delegation to an administrative body without strict guidelines. See Great Cruz Bay Development Corp. v. V.I. Bd. of Land Use Appeals, 18 V.I. 536, 541 (D.V.I. 1981). Although this is the weakest challenge, this Court sees little in the language of title 1, section 4 under this approach to
An inquiry into the prevalence of the Second (and Third) Restatement of Property, in light of the break with the Restatement (First) of Property, should be supplied.
The introduction to the Restatement (Third) of Torts: Products Liability is proffered as an example. Restatement (Third) of Torts: Products Liability, Introduction at 4 (1998). Perhaps anticipating that Courts may misapply the provisions contained therein, the drafters of the Restatement suggest that section 2(b) should not be applied without considering the other parts of the topic, “Liability Rules Applicable to Products Generally.” The drafters of the Restatement wanted to avoid any disjunctive analysis. It would be similarly improper to adopt previous Restatement provisions on a section-by-section basis.
Of course, this Court is bound to apply the Restatement restrictively, if an appellate court has taken the pains of limiting the adoption of the Restatement to particular provisions, to the exclusion of others. See Gass v. V.I. Tel. Corp., 311 F.3d 237, 241-46, 45 V.I. 649 (3d Cir. 2002).
In 1957, none of the ALPs Restatements of Law had reached their second incarnation. Thus, it is possible that the Legislature may not have contemplated the potential confusion regarding which version of the Restatement to apply. This inference is tempered by the fact that the task of restating American law had begun as early as 1952, culminating in the publication of the Restatement (Second) of Agency in 1958. See Restatement (Second) of Agency, Introduction at vii (1958). At the time of the enactment of title 1, section 4, in 1957, the Restatement (Second) and its potential restated or normative character was far from a certainty. Patrick J. Borchers, Courts and the Second Conflicts Restatement: Some Observations and an Empirical Note, 56 Md. L. Rev. 1232, 1234-37 (1997) (during the seventeen years that the ALI worked on the
Compare Fullford v. Rawls, 1986 U.S. Dist. LEXIS 16640 (D.V.I. App. Div. 1986) (unpublished), aff’d 838 F.2d 460 (3d Cir. 1987) (table), and Co-Build Co., Inc. v. Virgin Islands Refinery Corp., 15 V.I. at 533, 570 F.2d at 494-95 (disagreeing as to which Restatement should serve as the source of substantive law in the Virgin Islands for liquidated damages).
In situations where the Restatement (First) was silent, majority rules would be supplied by the newer Restatements or the rules of the common law as understood and applied in the Courts of the United States.
Today, since most jurisdictions employ some form of comparative fault, section 1451 of title 5 is a majority rule. At the time of it enactment, however, comparative negligence was an emerging doctrine and was contrary to the common law as summarized in the Restatement (First) of Torts. See 1973 V.I. Sess. Laws 10 (Act No. 3382) (entitled “To Add a New Chapter 99 to Title 5, Virgin Islands Code, To Alter the Doctrine of Contributory Negligence with a Comparative Negligence Standard”).
Often, courts cite to title 1, section 4 when choosing to apply provisions from Restatements other than the Restatement (First). See e.g., Estate of Savain, 39 V.I. 77, 80 n. 1, 82 (Terr. Ct. 1998). While these conclusions may have been correct in identifying the majority rule, they should have been accompanied by an explanation for that departure. It is noteworthy that this language also provides for a departure when the Restatement is silent on the particular topic.
The only differences are the following. Parts of the comments to the Restatement (First) of Torts section 388 were assigned new letters, resulting in a different lettering system in the Restatement (Second) of Torts. In addition, a caveat that previously existed in the Restatement (First) of Torts has been removed.
The discussion in note 37 supports the conclusion that this is a majority rule.
Numerous non-binding trial court decisions, have applied section 402A, including in a failure to warn context. See generally Poole v. Ford Motor Co., 17 V.I. 354, 357 (D.V.I. 1980); Battiste v. St. Thomas Diving Club, Inc., 15 V.I. 184, 189 (D.V.I. 1979). Restatement (Second) of Torts section 388 has also been applied by the District Court. Viger v. Commercial Ins. Co. of Newark, 19 V.I. 40, 42 (D.V.I. 1982) rev ’d on other grounds by 707 F.2d 769 (3d Cir. 1983).
Section 13 provides:
An act which, directly or indirectly, is the legal cause of a harmful contact with another’s person makes the actor liable to the other, if
(a) the act is done with the intention of bringing about a harmful or offensive contact or an apprehension thereof to the other or a third person, and
(b) the contact is not consented to by the other or the other’s consent thereto is procured by fraud or duress, and
(c) the contact is not otherwise privileged.
Restatement (First) of Torts § 13 (1934) (emphasis added)
(Pls.’ Compl. at 12.)
(Pls.’ Resp. to Def. Shell Oil Co.’s Mot. For Summ. J. (1) at 5-6.)
The section provides:
One party to a business transaction who by concealment or other action intentionally prevents the other from acquiring material information is subject to the same liability to the other as though he had stated the nonexistence of the matter which the other was thus prevented from discovering.
(Pls.’ Compl. at 13.)
The language of these provisions may be found in footnote 6. Causes of action may sound in negligence and in strict liability.
Shell asserts it is entitled to the “sophisticated user defense,” yet it appears that Shell was advocating the adoption of the sophisticated intermediary defense. The sophisticated
Jurisdictions adopting the “sophisticated intermediary” defense include: Indiana, Louisiana, Michigan, Montana, Maryland, Virginia, Arizona, Delaware, and Minnesota. See e.g., First Nat. Bank and Trust Corp. v. American Eurocopter Corp., 378 F.3d 682 (7th Cir. 2004); Swope v. Columbian Chemicals Co., 281 F.3d 185 (5th Cir. 2002); Rusin v. Glendale Optical Company, Inc., 805 F.2d 650 (6th Cir. 1986); Higgins v. E.I. Dupont de Nemours & Co., Inc., 671 F. Supp. 1055 (D. Md. 1987), aff'd, 863 F.2d 1162 (4th Cir. 1988); Goodbar v. Whitehead Bros., 591 F. Supp. 552 (W.D. Va. 1984), aff'd sub nom. Beale v. Hardy, 769 F.2d 213 (4th Cir. 1985); Dole Food Co., Inc. v. North Carolina Foam Indus. Inc., 188 Ariz. 298, 935 P.2d 876 (Ct. App. 1996); In re Asbestos Litigation (Mergenthaler), 542 A.2d 1205 (Del. Super. Ct. 1986); Gray v. Badger Mining Corp., 676 N.W.2d 268 (Minn. 2004); Phillips v. A.P. Green Refractories Co., 428 Pa. Super. 167, 630 A.2d 874 (1993) aff'd sub nom. Phillips v. A-Best Products Co., 542 Pa. 124, 665 A.2d 1167(1995).
The “sophisticated user” defense has garnered more widespread approval. The following jurisdictions have acknowledged the propriety of the defense, in at least some form: Iowa, Louisiana, Ohio, Virginia, Montana, Nevada, Kansas, Arizona, Delaware, Idaho, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Washington and Wisconsin. See e.g., Bergfeld v. Unimin Corp., 319 F.3d 350 (8th Cir. 2003); Swope v. Columbian Chemicals Co., 281 F.3d 185 (5th Cir. 2002); Adkins v. GAF Corp., 923 F.2d 1225 (6th
The duty to warn may still exist if such a casual inspection is not likely to occur. Restatement (First) of Torts § 388 cmt. i.
This defense has its foundation firmly rooted in the principles of pragmatism and convenience, such that shifting the duty to an intermediary with greater access to the ultimate users increases the likelihood that the warning will be effectively conveyed and sufficiently tailored to the intended audience.
Another difference between the Restatements exists with regards to the reasonableness inquiry. The Restatement (Third) of Torts: Products Liability § 2, comment i advocates a slightly different test, though it embodies the same ideals. It considers the following factors:
(1) The gravity of the risks posed by the product,
(2) The likelihood that the intermediary will convey the information to the ultimate user, and
(3) The feasibility and effectiveness of giving a warning directly to the user.
(4) Nature of risks disclosed and their importance in consumer decisions (especially non-obvious and not generally known risks)
(Willet Dep. at 71:12-25, 73:17-23.)
Shell maintains that the label should only describe the contents of the container, which were fresh not spent catalyst. It also claims that two items are different compounds. The Court need not reach this issue for a determination of the latency of the dangerous condition of the product. In reserving discussion, this Court recognizes that this argument may also bear on the adequacy of Shell’s warnings as a whole, discussed in the third factor of this test. As the discussion in factor three will illustrate, if the additional dangers of spent catalyst were highlighted in the MSDS, despite their absence from the labels, it might make the collective warning adequate.
Shell submits that as early as November 15, 1982, during preliminary negotiations, it supplied HOVIC with MSDS version 7050-3, accompanying a letter that discusses cobalt catalyst product number 544. (Willett Dep. Ex. 10, 11.) Based on Shell’s sales records, HOVIC should have received at least three additional MSDS, versions 6655-0, 6660-4, and 11590-8, as a result of known sales of catalyst beginning in February 1984. (Willet Dep. Ex. 8; Pls.’ Resp. (II), Ex. G.) Yet, none of these MSDS specifically
This is a “know” or “should have known” standard. 63A Am. Jur. 2d Products Liability § 1195 (1997).
The record contains a series of nine labels that purport to cover the range of all labels affixed to Shell catalyst products delivered to HO VIC during the period of 1982 to 1988. (Willett Dep. at 33:8-12.)
(Willett Dep. Ex. 5-A-5-I.)
(Willett Dep. at 17:8-17.)
(See Willett Dep. at 17:8-18:2) (suggesting that both OSHA and the Department of Transportation require goods in interstate commerce to be shipped with labels).
(Pls.’ Resp. (II), Ex. G.)
The label version is D9720, Rev. 1/83. (Willett Dep. Ex. 5-A.)
See note 43.
These versions are not in the record but are mentioned during John Willett’s deposition testimony. (Willett Dep. at 77:19-78:23, 42:1-25.) Version 6655-6 was finalized in June 1987 and likely distributed soon thereafter. (Id. at 42:11-12.) It provides that spent catalyst has been shown to produce positive carcinogenic effects in experimental animals. (Id at 42:21-24.)
(Willett Dep. at 90:7-91:24.)
Id.
(Willett Dep. at 94:17-95:4.)
(Willett Dep. at 90, Ex. 8.)
(Trevino Dep. Ex. 2-D, Willett Dep. at 90:7-91:24.)
(Pls.’ Resp. (II), Ex. D.)
(Trevino Dep. Ex. 2-D.)
(Willet Dep. 61:10-16, Ex. 7.)
(Def. Shell Oil Co.’s Mot. For Summ. J. at 13, fn. 9.)
HOVIC had the following policies and procedures in force by at least 1980, among others: (1) a safety department monitoring workplace exposures and drafting policy in conjunction therewith; (Hutchins Dep. at 123:2-3; Edgley Dep. at 224:20); (2) a stated policy for the loading and unloading of catalyst that required the use of respiratory equipment; (Edgley Dep. at 217:13-218; Comly Dep. at 125-26); (3) the required issuance of hazardous work permits, signed by all employees and contractors, detailing the vessels, preparation and protective equipment necessary to complete all tasks involving respiratory equipment, including the loading and unloading of catalyst; (Edgley Dep. at 217:14-16, 220:10-22; Comly Dep. at 125:13-21); (4) the mandatory training of contractors and employees for use of respiratory equipment/fresh air equipment provided by HOVIC safety department; (Sagebien Dep. at 141:4 - 142:14; Comly Dep. at 127); and (5) annual inspections of the catalyst exposure levels conducted by safety officials; (Edgley Dep. at 233:1-18.) HOVIC also provided guidance to contractor employees and collaborated directly with contractors regarding safety measures. (Sagebien Dep. at 140, 184:22-25.) Finally, Litwin Corporation employees were subject to HOVIC regulation. (Halevy Dep. at 36:13-22.)
Some courts have found that there should still be an inquiry into the likelihood of transmittal of the warning, notwithstanding the presence of OSHA regulations. See Kennedy v. Mobay, 84 Md. App. 397, 579 A.2d 1191, 1202-03 (1991) (citing Eagle-Picher Indus., Inc. v. Balbos, 84 Md. App. 10, 578 A.2d 228, 255 (Md. Ct. Spec. App. 1990)). Others have held that a supplier acted reasonably in relying on an employer to convey the warning based on OSHA regulations. Washington v. Dep’t of Transp., 8 F.3d 296, 300-01 (5th Cir. 1993).
(Edgley Dep. at 227:13-16, 228:12-25.)
(Willett Dep. at 46,48-49, 50, 52, 69.)
HOVIC testimony appears to be conflicting with regards to the sanctioning of employees for failure to adhere to safety rules. (See Sagebien Dep. at 176, 184; Newcomb Dep. at 197:12-14).
See Kennedy, 579 A.2d 1191 at 1202-03 (noting that the defendant satisfied the sixth factor because employers workplace was not accessible to supplier for direct warnings due to the protection of the employer’s trade secrets).
(Def. Shell Oil Co.’s Mot. for Summ. J. at 15,16.)
(Pls.’ Resp. to Def. Shell Oil Co.’s Mot. For Summ. J. (II) at 25-27,30.)
The final issue before the Court is the determination of the applicability of the defense to strict liability failure to warn causes of action. The Court defers this inquiry for another time because Shell failed to establish the elements of the defense.